O2 was right to ditch "unlimited" iPhone 4 data plans

For the last few years, the argument surrounding use of the word "unlimited" in mobile network and ISP advertising has become so deafeningly loud it's painful. Take Orange, for example: it just announced its iPhone 4 plans. "Unlimited mobile internet", it claims, before the small print highlights the 750MB limit. And not just on 3G, either -- Wi-Fi, too.

It's called a "Fair Use" policy -- appropriately abbreviated F.U. -- and it's common practice; Orange isn't on its own here. "In line with the majority of our competitors, we operate a fair usage policy to ensure a fair allocation of network resources for all," an Orange spokesperson told me. "Our fair usage policy is not a 'cap', and we will not restrict your service or charge you extra should you go slightly over the indicated allowance."

But O2 has (finally) chosen a different tactic: it has stopped using the term "unlimited" and spells out that this is how much data you're paying for, and that's how much you can use -- between 500MB and 1GB of monthly 3G data. If you go over your allowance, rather than charging you O2 will throttle the speed of your data connection, as Orange does.

Now I'm not going to argue whether they're good allowances, or whether offering "unlimited" data with surreptitiously enforced restrictions on what you can and cannot use the network for is better. But for what it's worth, I use my iPhone as a business and personal phone, and I only use about 250MB of data a month. Orange told me its customers use an average of 175MB.

But still, Orange has opted to advertise "unlimited" iPhone 4 data plans with an F.U. policy anyway. And when it did, my Twitter stream lit up: "Why do the government allow this?" asked one of my Twitter followers.

"It should be acceptable to describe an aspect of a service as 'unlimited' (e.g. 'for just £12 a month you can make unlimited calls to numbers beginning 01 and 02') despite the existence of a fair-use policy, which is invoked to prevent misuse of the service, providing the policy's existence is stated in the ad."

Basically, as long as you mention your "unlimited" service has an enforceable limitation, you're okay to advertise it as having no limit, and the ASA has ruled as such. In September 2008 for example, T-Mobile was probed for use of the term "unlimited" after complaints about one of its advertisements in the national press. "The only service with unlimited* WiFi HotSpots included in your broadband plan," T-Mobile was claiming of its bundled public Wi-Fi service, before pointing out in the small print that to "ensure a high quality of service for all our customers, a fair use policy of 3GB (of data both sent and received in the UK) per month applies as well as other restrictions."

Unlimited data with a 3GB limit? Not fair, cried British Telecom and a member of the public. The ASA heard the complaint, then considered T-Mobile's response: "The claim 'unlimited' was directly asterisked to small-print that stated clearly the existence of their fair-use policy… It was a policy and not a finite allowance… The fair use policy only excluded atypical users."

The ASA ruled in favour of T-Mobile's advertisement -- saying something is "unlimited" when it has an F.U. policy in the small print "was not misleading". T-Mobile had done nothing wrong.

But it's not that cut and dry -- there are key exceptions. T-Mobile -- just a year prior the above complaint about its own use of the term "unlimited" -- believed a particular advertisement of Orange's, in which "truly unlimited" mobile calls were being promoted despite a 3,000 minute-per-month F.U. policy, was misleading.

According to the ASA, T-Mobile believed that "because 3,000 minutes per month equated to one hour 40 minutes per day only, the claims 'conversations that last for hours and hours', 'take up whole mornings and whole nights' and 'talk for hours' were misleading.

Orange defended its ad. In response to the complaint, it told the ASA that the F.U. policy didn't impose a hard limit, and that users would still be able to text and call above the 3,000/3,000 mark without cost -- it was to protect against network capacity abuse, exactly as the ASA/CAP usually agrees is acceptable.

Except the ASA, in this instance, did not agree: "We considered that the claim 'truly unlimited', in combination with the other claims in the ad, was ... contradicted by the fair usage policy qualification in the small print. We concluded that the ad was likely to mislead."

Thus, Orange was told to neither repeat the ad nor use the term "truly unlimited" unless -- shocker -- it was truly unlimited. So even if an F.U. policy is printed alongside an unlimited claim, it doesn't necessarily mean it's allowed by the ASA, despite its stance on the matter.

It's an ambiguity that continues to baffle and annoy consumers, journalists and commentators alike -- even companies that enforce their own F.U. policies on "unlimited" services find something to complain about in those of their competitors.

So when a company (O2 in this case) comes out to say "It's not unlimited -- here's how much you're paying for", I have to stand behind it. It not only avoids standards body time-wasting, it offers the consumer a clear message: we're selling you a product, and here's what it is.

Comments

Just to say, I found this article well written and very clear. Unlike the phone companies' use of the term 'unlimited', ironically.

Paul

Jun 17th 2010

A policy statement by the British Standards Advertising Authority is unlikely to over-ride the Misreprentation Act which is statutorily binding

Paul II

Jun 18th 2010

I have an 18 month subscription with Virgin Media, whom I selected after looking at the UK selection of ISPs. I wanted as much Internet access as possible, above any need for voice and text services.

I promptly fell into this "unlimited internet access" trap.

This month alone, my service has been cut off twice as my "credit limit" was exceeded, first at a £150 threshold then at a £200 level.

After spending a lot of time arguing with Virgin media, I find that my "terms and conditions" allow this :

1GB per month s the actual limit to my "unlimited Internet access" and above that I must pay Virgin £2 per MB, which actually translates to £2000 for the second GB !!

2 grand a Gigabyte, a figure confirmed by several of Virgin's staff and enforced by their Billing Department.

Deceptive and misleading at the very least, obscene and unethical I call it Mr Branson.

JoeBlow

Jun 18th 2010

Just yesterday I got a letter from BT talking about a "great" offer, including various "free" and unlimited things. Reading the back of the letter, going thorugh the small print one finds out though how unlimited is actually limited. It was about calls and although they use the term unlimited, they mean a certain number of calls, each lasting no more than 60 minutes. While I accept that this can still be classed as a generous offer, 'unlimited' means just that: un-limited, without limits. To add insult to injury though it also mentions that other exclusions apply, which is nothing but a open check book, which BT can use to "limit" the unlimited even further.I wished I studied law to nail those liars.... :-)

ondo

Jun 18th 2010

The problem I have with everyone using the "I only use 250MB of data a month" argument is that it's very 'now' thinking.

The new smartphones are pushing out HD video, which is going to increase our bandwidth usage right there.

This doesn't take into account any future advances that will mean even more bandwidth requirements.

Who knows what we'll be using our phones for this time next year!

When the majority of users are requiring more than 500mb a month will o2 increase the bandwidth limit. I bet they won't. They'll have us bent over a chair and rubbing their hands with glee as they take even more money from us a month!

Michael Wilson

Jun 18th 2010

You're just being provocative. The acronym for Fair Use Policy is FUP not FU, as well you know.

bogwart

Jun 23rd 2010

Hmmmm im not sure about o2 capping the data to only '500 mb' an iphone is one of the best phones or could be the best device out there to browse the internet. About 60% of apps on my iphone rely on internet data and ive used approx 4GB of data so far this month. Its a shame really coz customers are paying hefty £400-600 for a payg (simfree) iphones and £35-60 a month on contracts and there not really getting there moneys worth IMO. O2 state that only 3% of customers which is about 250,000 people use more than 500MB data each month but why not give those 250,000 users (including myself) a additional bolt on which has 'unlimited access' and let us use our iphones to their full potential? when the iphone 5 comes out will data be capped even more as more people will be using iphones???

John white

Sep 21st 2010

I have upgrated my contract with Phones 4 you and while speaking with customer advisor i was told I'm getting unlimited internet usage on my iphone as I asked for it but when my contract arrived on paper it was statet I can only use 500MB without charge per month!!!! nobody has told me unlimited means 500MB in phones 4 you language..... :-(

agatha

Oct 1st 2011

In reply to agatha

Thats a form of mis-selling. You could have that contract terminated if you so wish.

Shmoo

Nov 4th 2011

This whole thing is a mockery. My Smartphone is completely useless without the internet. Without a constant link to the internet it does NOTHING except text and call.

It's 2012 and in 2012 we have websites like youtube or things like podcasts that stream hour long audio for people whil they're at work or whatever. Of COURSE you're going to use alot of bandwidth..it's not 2001.

Unfortunatley I've been locked into a 12 month contract with a dodgy salesman that assured me that "Oh no it'll be enough internet" (burned through it in one six hour day at work).

I'll never re up with 02 and I suggest to anybody reading that you try other phone networks first. They have been nothing but trouble since I started with them, anyway. Just lousy service all round.